Editor’s note: The following is a guest perspective.
By MABÉL GUZMÁN
After selling residential real estate for more than 13 years, I took the step to go out on my own and open a brokerage. While the process of getting partners was relatively easy, the process of getting them to listen … not so much.
From my experience, here are a six tips for those of you also considering whether to build something from scratch:
1. Draw on your past career and educational experiences to give you a leg up on execution and planning — in real estate and otherwise. From my retail background, I drew upon human resources knowledge for company policies, I drew upon logistics and analysis for identifying opportunity markets, and my experience in merchandising helped me to create and delineate departments.
2. Create a written understanding with your partners to establish roles and responsibilities — even before developing a strategic business plan. Promise each other, in writing, that you will be willing to take a backseat support role under certain circumstances. There is no room for ego in decisions that involve your company’s health.
3. Recognize that your relationship to clients is different as an owner than it was as an agent. As an owner you’re flying at a higher altitude — let’s say 60,000 feet instead of 30,000 — and looking at the organization as a whole. How do all the moving parts fit together? How can you be sure they will continue to move without you in the picture, or when you need to take a break?
4. Realize that your employees want more than a paycheck and benefits. They want a participatory environment. Disagree with each other if you wish, but every year polls show employees rate personal buy-in, feeling valued, and an open-door policy highest. Remember, too, that they rely on your business’ success to put food on the table.
5. View your vendor relationships as affinity programs. How can you build your businesses together while offsetting costs? Ultimately, you’re after the same customers. Develop new offerings together that increase profits for you and your vendors. Offerings don’t have to directly relate to transactions. They can provide economic relief through other products and services. Have clear, concise agreements with expiration/renewal dates.
6. Develop your agents into well-educated businesspeople who have a stake in your company, who will grow with you, and will help duplicate successes through information-sharing. These agents will expand your market share by bringing in more clients.
With my partners, it is all about honesty, open discussions and analyzing what’s working and not working within a program. Do not throw out capital investments without cause. Break your programs down to understand the roots of their failure and success. Give them sufficient time to gel. Realize recouping your initial investments could take more than three years.
It comes down to being flexible, fluid, frank and having patience. Just like any child with a new toy, it is hard to look at opportunities and not want to go after them immediately. This time, though, your new toy is capitalized and has an expected timeframe of return.
Be patient. Work on systems first and keep flying at a low altitude as you watch and hear about the challenges your people face. Then hit full speed, pull the nose up, and fly.
Mabél Guzmán, 2010-11 president of the Chicago Association of Realtors, is also president of business development and sales for Envision Real Estate.